Liberty American Ins. Group, Inc. v. WestPoint Underwriters, L.L.C., 199 F.Supp.2d 1271 (M.D.Fla. 2001)

Transcription

1 ELEMENTS: Trade secret owned and maintained by Plaintiff; Knowing misappropriation by Defendant; Damage to Plaintiff. HERE: Customer lists, etc. Basis of new business Loss of business Liberty American Ins. Group, Inc. v. WestPoint Underwriters, L.L.C., 199 F.Supp.2d 1271 (M.D.Fla. 2001)

2 The gist of [injurious falsehood] is the interference with the prospect of sale or some other advantageous relation; and it is equally possible to disparage the plaintiff s s business by reflecting upon its existence or character, [or] the manner in which it is conducted without affecting any property. W. Page Keeton, et al., Prosser and Keeton on The Law of Torts 128, at 966 (5 th ed. 1984).

3 ELEMENTS: HERE: False statement Communication to third party Likely harm known Falsehood played a material role in damaging Plaintiff Job loss scare EE employees By virtue of position Loss of employees Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 742 So.2d 381 (Fla. 4th DCA 1999)

4 Closely-knit religious community Honor, trust important Contracts often not written Both parties own various business entities

5 Klein sought financing Nettles lent millions Many real estate deals

6 Nettles became concerned Klein made excuses Nettles discovered diversion of funds

7 Breach of Fiduciary Duty? Did Klein owe Nettles the duties of a fiduciary? Not a classic scenario Fiduciary duty is implied in law when confidence is reposed by one party and a trust accepted by the other. Capital Bank v. MVB, Inc.,, 644 So.2d 515, 518. The burden of proving such a relationship is on the party asserting it. Kislak v. Kreedian,, 95 So.2d 510, (Fla. 1957).

8 ELEMENTS: Extensive/complicated accounts Inadequate remedy at law HERE: Convoluted transactions, little documentation Forensic accounting necessary Bankers Trust Realty, Inc. v. Kluger, 672 So.2d 897, 898 (Fla. 3d DCA 1996)

9 Racketeer Influenced and Corrupt Organization Act (18 U.S.C.A ) Basic Elements (simplified): Conduct of an enterprise Through a pattern Of racketeering activity

10 Conduct of an enterprise Requires proof of the existence of an enterprise which is: A legal entity, an associated in fact entity, or a governmental entity; Engaged in, or the activities of which affect, interstate or foreign commerce; Pled as a separate and distinct element from the pattern of racketeering activity; Distinct from Defendant. Here: Klein operated numerous LLCs and sole- proprietorships Engaged in real estate transactions in multiple states

11 Through a pattern Requires proof of a pattern of racketeering activity consisting of at least two acts of racketeering activity within ten years or the collection of an unlawful debt; Here: Klein engaged in two or more predicate acts he fraudulently solicited funds from Nettles on multiple occasions using wire ( d t l h )

12 Of racketeering activity Requires proof of statutorily defined racketeering activity (see 18 U.S.C.A. 1961(1)) Here: Scheme perpetrated through wire fraud violations under 18 U.S.C and mail fraud violations under 18 U.S.C Rogers v. Nacchio, 241 Fed.Appx. 602, (11th Cir. 2007)

13 ELEMENTS: Conferral of benefit Acceptance Inequitable under the circumstances HERE: Nettles lent millions Klein retained money Inequitable for Klein to keep money Peoples Nat l Bank of Commerce v. First Union Nat l Bank of Fla., N.A., 667 So.2d 876 (Fla. 3d DCA 1996)

14 ELEMENTS: A promise, express or implied; Transfer of the property and reliance thereon; Confidential relationship; Unjust enrichment. HERE: Klein fraudulently promised to repay Nettles relied and made the loan Fiduciary duty Inequitable to allow Klein to retain benefit Standard of Proof: Clear and convincing evidence Hiestand v. Geier, 396 So.2d 744 (Fla. 3d DCA), rev. denied, 407 So.2d 1103 (Fla. 1981)

15 ELEMENTS: HERE: Defendant made a Klein promised to repay promise which Nettles with interest; Defendant reasonably Which induced Nettles to expected Plaintiff to act lend Klein the money; upon; Injustice can only be Plaintiff in fact acted avoided by enforcement upon it; and of Klein s s promise. Injustice can only be avoided by enforcing the promise Argonaut Development Group, Inc. v. SWH Funding Corp., 150 F.Supp.2d 1357 (S.D.Fla. 2001)

16 Tortious Interference with a Business Relationship The existence of a business relationship A protected business relationship need not be evidenced by an enforceable contract, but must afford Plaintiff existing or prospective legal or contractual rights. Register v. Pierce,, 530 So.2d 990, 993 (Fla. 1st DCA 1988). Defendant s s knowledge of the relationship Defendant s s intentional and unjustified interference with the relationship; Damage to Plaintiff as a result of the breach of the relationship. Gossard v. Adia Services, Inc.,, 723 So.2d 182 (Fla. 1998).

17 Tortious Interference with a Contract Right The existence of a contract; Defendant s s knowledge of the contract; Defendant s s intentional procurement of the contract s s breach; Absence of any justification or privilege; Damages resulting from the breach. Smith v. Ocean State Bank,, 335 So.2d 641 (Fla. 1st DCA 1976).

18 Tortious Interference The torts of Interference with a Contract Right and Interference with a Business Relationship differ only slightly. See McDonald v. McGowan,, 402 So.2d 1197 (Fla. 5th DCA 1981)

19 Replevin Cause of Action for the wrongful taking or detention of any specific personal property. Cause of Action must contain the following elements: Description of the claimed property sufficient for its identification and a statement of its value A Statement that Plaintiff is the owner of the claimed property A Statement that property is wrongfully detained by the defendant, the means by which the Defendant came into detention thereof, and the cause of such detention A Statement that the claimed property has not been taken for a tax assessment or fine pursuant to law A statement that the property has not been taken under an execution or attachment against the property of the Plaintiff See , Florida Statutes

20 Breach of Contract To establish a breach of contract, a party must show the existence of a contract, a breach thereof, and damages. AIB Mortgage Co. v. Sweeney,, 687 So. 2d 68, 69 (Fla. 3d DCA 1997).

21 Breach of Contract Defenses Economic Loss Rule Statute of Frauds Breach by Other Party When one party unjustifiably refuses to perform his agreement, the other party has the option to rescind the entire contract. Savage v.. Horne,, 31 So. 2d 477, 482 (Fla. 1947). Lack of Consideration A failure of consideration is a defense to a contract. Vichaikul v.. SCAC Enterprises,, 616 So. 2d 100 (Fla. 2d DCA 1993)

22 Breach of Contract Defenses Continued Duress Where duress is present in the execution of a contract, the agreement is voidable. Davis v.. Hefty Press, Inc.,, 11 So. 2d 884, 886 (Fla. 1943). Impossibility If the purpose for which the contract was made has, for one party, become impossible to perform, that party has a defense to the contract for impossibility of performance. Home Design Center v.. County Appliances of Naples,, 563 So. 2d 767, 769 (Fla. 2d DCA 1990). Mistake A party can rescind a contract based on a unilateral or mutual mistake as to a material element of a contract. Williams v. Harbour Club Villas,, 436 So. 2d 233, 235 (Fla. 3d DCA 1983).

23 Breach of Contract Defenses Continued Unconcsionability Unconscionability is an affirmative defense that can be raised where an agreement unfairly benefits one party over the other. See Barakat v.. Broward County Housing Auth.,, 771 So. 2d 1193, 1194 (Fla. 3d DCA 2000). Other Defenses Anticipatory Repudiation Illegality Frustration of Purpose Fraud

24 Negligent Misrepresentation To prove negligent misrepresentation it must be shown that: There was a misrepresentation of material fact; The representer either knew of the misrepresentation, made the representation without knowledge of its truth or falsity, or should have known the representation was false; The representer intended to induce another to act on the misrepresentation; and Injury resulted to a party acting in justifiable reliance upon the misrepresentation. Bagget v.. Electricians Local 915 Credit Union,, 620 So. 2d 784, 786 (Fla. 2d DCA 1993).

25 Account Stated/Open Account Actions for an account stated and open account are to distinct causes of actions. An account stated claim is an agreement between persons who have had previous transactions, fixing the amount due in respect to such transactions and promising payment. South Motor Company v.. Accountable Const. Co.,, 707 So. 2d 909, 912 (Fla. 3d DCA 1998). An open account is an unsettled debt arising from items of work and labor, with the expectation of further transactions subject to future settlement and adjustment. Id.

26

27

28

29 Conclusion Causes of Action State or Federal Court Strategy Client Objectives

30 End of Presentation